Improve Compliance and Uniform Administration Taxpayers’ Bill of Rights Annual Report to the Legislature

Legislative Proposals and Regulations

Changes in Statutes – Legislative Proposal Summary

In accordance with reporting requirements outlined in California Revenue and Taxation Code (R&TC) Section 21006(c)(1), the following are legislative proposals that have been approved by the three-member Board.

Legislative Proposals That Were Enacted Into Law:

None.

Legislative Proposals That Were Not Introduced Into Bills:

None.

Note: Federal Direct File Notification (Introduced, but not chaptered)

Proposes to require employers to notify their employees about the IRS's Direct File Program. This proposal was introduced by the Assembly Revenue & Taxation Committee as part of Assembly Bill (AB) 1519 on March 13, 2025, and it’s currently in the second house with the Senate Revenue & Taxation Committee.

Training of FTB Staff

FTB develops knowledgeable and engaged employees to improve the customer experience and accomplish FTB’s mission. Our goal is to provide the services and information taxpayers need to file accurate and timely tax returns and to only pay the proper amount of tax owed. Training begins with our employees’ first day on the job and continues throughout their FTB careers.

Public-facing staff in our Filing and Accounts Receivable Management (ARM) contact centers and public service counter staff receive extensive initial training, on-the-job training, and ongoing training, with programs tailored to the specific needs of each business area.

The ARM Division continues its commitment to growing and developing staff at all levels. In 2025, the division placed a strong emphasis on equipping staff and leaders to successfully navigate change. As the division continues rolling out the new compliance system and expanding self-service options for customers, training and development have been critical in supporting staff adaptation and providing exceptional customer service. The 2025 ARM Leadership Day focused on empowering leaders to champion change management practices through transparency, active listening, and intentional support of their teams. These themes have continued throughout the year, with leaders engaging in regular team meetings, one-on-one coaching, and mentorship to reinforce a culture of continuous improvement and understanding of the broader impacts of the system and customer self-service options.

To ensure success in the evolving environment, ARM has enhanced its new hire training program by integrating interactive learning modalities that build technical expertise in collections, systems, and customer service. In addition, veteran staff benefit from cross-training, peer mentoring, internal manual development, and ongoing knowledge-sharing initiatives. The ARM Promoting Employee Development Team continues to support staff growth by offering motivational presentations from leaders within the division, providing developmental workshops partnered with enterprise Talent Management, and orienting new hires with tools for success in their careers. Through these efforts, the ARM Division is fostering a culture of learning and adaptability—one that builds confidence, supports staff through change, and positions the division for long-term success.

The ARM Division also prioritized new hire training in-person beginning January 2024. By utilizing the new Advance Hybrid Training Room technology installed in FTB’s training rooms, the ARM Division provided a hybrid training format to include new hires in-person and from the field offices. This equipment and technology would allow for both the trainer and the room participants to be seen by any remote participants, all while the materials are still presented visually in the classroom and to virtual participants. This more immersive experience gives our new hires a greater opportunity for sustained success.

The Audit Division provides extensive training for their staff. This training includes both classroom and virtual instruction at all stages of their career. Division training includes, but is not limited to, analyzing tax returns, researching complex tax issues, and communicating audit findings to the taxpayer in verbal and written forms. Many of our knowledge transfer processes include these training forums and on-the-job training of various types of issues, industries, and services.

The Audit Division continues to maintain its Pathways to Excellence portal, which is a knowledge transfer and training resource for staff. In simplistic terms, this portal maps out different “pathways” for staff development that identify technical education opportunities with other value-added learning experiences and collaboration opportunities. The Audit Division Job Knowledge Transfer training series provides presentations on technical issues to enhance staff’s performance in their daily work functions. The Audit Division Mentoring Plus Program creates a culture of learning, sharing, and networking by pairing auditors with people with different backgrounds and expertise. Having well-trained auditors shortens the completion time of conducting audits and improves the accuracy of the outcome, thereby better serving taxpayers.

For Fiscal Year 2024/2025, the Filing Division provided training to over 750 newly hired employees, including classes about personal income and business entity tax law, account resolution procedures, and improving our customer experience. Employees attend various formal and informal training, both in-person and virtual, to refresh their skills, learn new workloads, and remain informed of changing laws and procedures. Training classes are continuously reviewed and modernized to leverage technology by incorporating interactive computer-based training. Sessions like these provide staff with the information, experience, and support that enables them to deliver quality service to taxpayers while also educating them on how to reduce questions or confusion.

The Filing Division also develops the training concepts and materials to train free tax preparation site coordinators and volunteers throughout the state on California tax law and return preparation as part of our Volunteer Income Tax Assistance (VITA) Program. VITA assists lower-income individuals, senior citizens, and military personnel in filing personal income tax returns. FTB VITA volunteers come from throughout the department, including field offices. The Filing Division also facilitates the central office VITA site, which provides federal and state income tax help and electronic filing support for FTB employees and their families. For the 2025 Tax Filing Season, 108 FTB staff were certified as volunteers, including 32 first-time volunteers. Training was provided to 1,429 volunteers and site coordinators throughout the state to assist with the 2025 Tax Filing Season. FTB’s VITA staff and volunteers participated in 45 events and volunteers assisted with over 4,440 federal and California state returns. Increasing our FTB VITA volunteers allows FTB to market the VITA Program to more communities, resulting in an increase in the number of individuals who can utilize and benefit from the VITA Program.

The Legal Division continues to focus on its knowledge transfer programs to increase the sharing of knowledge and ensure a highly trained workforce. This effort includes providing cross-training opportunities among the bureaus of the Legal Division, mentoring new staff, and expanding and marketing the information libraries maintained by the Legal Division. The Legal Division has a Professional Development Program, which provides regularly reoccurring trainings by subject matter experts on different tax issues. Legal staff are also encouraged to participate in other training opportunities offered throughout the enterprise, such as Job Knowledge Transfer presentations and online training, as well as continuing to participate in speaking engagements and webinars.

Across FTB, we continue to take steps to ensure FTB remains a workplace where employees from all backgrounds, cultures, and personal experiences are welcome and thrive in support of FTB's mission, values, and goals. We believe a strong commitment to supporting a sense of belonging and respect in the workplace helps foster innovation, improves productivity, and continues to attract top talent by making us an employer of choice. This commitment also helps ensure FTB can meet the needs of our highly diverse state. Internally, we regularly post articles and videos on an array of topics to support our commitment to serving all Californians. In 2024, FTB released an awareness video training module titled “The You in Us” that was developed in-house. All employees are encouraged to take the training, which highlights how important every individual employee is to FTB’s success.

Over a four-month period in early 2023, we conducted training for all FTB supervisors nationwide that provided information and tools for more effective relationships with, and management of, staff in today’s hybrid (telework and office) work environment. Additional sessions of this training were conducted in 2024.

In early 2025, FTB supervisors nationwide were invited to attend an eight-session training series titled “Let’s Talk” that focused on strategies for how to better hold crucial and sensitive conversations, and on how to hold people accountable when expectations are not being met. Over 300 supervisors signed up to take these sessions, which were done in-person and in a hybrid fashion.

Finally, all FTB personnel who are classified in FTB’s conflict of interest code are required to take an ethics training course provided by the California Department of Justice within six months of appointment to a classified position and once every two years thereafter. Additionally, all FTB staff are required to complete annual Privacy, Security, and Disclosure web-based training.

Evaluating FTB Employees

FTB is committed to evaluating and providing feedback to our employees with the goal of helping them perform at the highest level in their current positions and to advance professionally when promotional or developmental opportunities arise. Our goal is not only to provide all eligible employees with a written performance evaluation annually, but to ensure the evaluation and feedback they receive is valuable. The most important part of the annual evaluation process is sincere, respectful, and open conversations with employees regarding expectations and performance.

Customer service has always been one of FTB’s highest priorities. In recognition of this priority, FTB continues to evaluate employees during annual reviews based on how well they communicate with taxpayers, tax professionals, and other stakeholders, and the overall quality of the customer service provided. Evaluations include assessing whether employees have provided customers with accurate, timely, and complete assistance. Our goal is for every employee to exceed each customer’s expectations. Importantly, we do not evaluate employees based on revenue that is produced through additional tax assessments or collections, and FTB does not impose or suggest revenue production quotas or goals. (Refer to Appendix 4 — Certification Letter.)

We provide our supervisors with tools to assist in writing, online routing, and storing employee performance evaluations. These tools help us reach our goal of every eligible employee receiving a timely evaluation. In addition, we continue to provide tools and training to assist supervisors in having effective one-on-one conversations with their employees to build better connections, provide valuable feedback on performance, and maintain accountability for the expectations that have been set. We continue to reinforce the expectation that every supervisor will have regular one-on-one meetings with each of their employees.

A key component of employee and supervisor meetings is to have continuing discussions on performance expectations and to identify training and development needs. Discussing employee development opportunities is especially critical in today’s environment due to the rising number of employees who are eligible for retirement. It is an important part of our efforts related to workforce and succession planning.

Taxpayer Communication and Education

We strive to provide taxpayers, tax professionals, and external stakeholders with the information they need to file state tax returns completely, accurately, and timely. The department continues to focus on education and outreach efforts, creating useful tools and resources, and improving services.

FTB uses mainstream, trade, and social media to communicate important information to taxpayers and tax professionals. We post information on social media platforms, respond to news media inquiries, create video clips and webinars, and provide public service announcements to educate taxpayers. We are always looking for ways to improve our website, such as by adding self-service options for taxpayers and by ensuring the information they need is available.

New ftb.ca.gov Webpages and Updates

Our Digital Services Section created or updated FTB webpages (ftb.ca.gov) covering a variety of topics in Fiscal Year 2024/2025, including the following:

New Webpages:

Updated Webpages:

Online Self-Service

Historically, users registering for a MyFTB account need a Personal Identification Number (PIN) to activate their online account. For increased security, FTB mails the PIN to the address of record and the user enters it as the final step in the registration process. Since February 2022, individuals and tax professionals have had the ability to choose how they want to activate their MyFTB account. They can continue to have a PIN letter mailed, or they can try to be verified for instant access by answering some personal information questions through our new Real-Time Identity Proofing and Enrollment process.

In Fiscal Year 2024/2025, approximately 285,000 users registered for a MyFTB account, including over 4,600 tax professionals. Our number of individual taxpayer registrants has continued to stay steady. In Fiscal Year 2023/2024, largely attributable to the implementation of Real-Time Identity Proofing and Enrollment, we had over 240,000 individuals register for an account.

We have almost 1.9 million total registrants for MyFTB, including over 62,000 tax professionals. MyFTB continues to provide additional information and functionality. Among other things, taxpayers can view notices and previously filed tax returns, chat about their account or send a message with attachments, protest assessments, and get detailed account information.

To improve customer experience for taxpayers and tax practitioners, FTB provided additional education and outreach by creating the POA and MyFTB Self Help Web Series. The series consists of thirteen videos based upon analysis and feedback from tax practitioners and provides step-by-step tutorials on the MyFTB registration process as well as POA and Tax Information Authorization. All videos are available on YouTube and ftb.ca.gov. This new content is presented on a redesigned POA webpage to help customers find answers and how-to instructions for their commonly asked questions. Also, we added instructional videos regarding using Web Pay to make estimated tax payments and using MyFTB to view estimated tax payments. Customer feedback has been positive.

Field Office Appointments

The Franchise Tax Board's field and public counter staff provide tax filing and payment assistance to taxpayers and their authorized representatives concerning PIT and BE Income Tax and Nontax Debt.

FTB field offices continue to serve customers by appointment, and our customers have the option to schedule an in-person appointment online or with the aid of a contact center agent. FTB's automated appointment system also sends text message updates to our customers as their appointment time nears. We found appointments provide improved customer experience and minimized wait times. As a result, we have maintained a 93 percent approval rating from our public counter customers.

CalEITC Direct Outreach to Taxpayers

In 2025, the third consecutive year of FTB’s Direct Earned Income Tax Credit (EITC) Outreach effort, approximately 200,000 letters were mailed to two groups of Californians who appeared to qualify for CalEITC but had not claimed it. The letters explained the potential value of the credit and how to claim it.

In July of 2025, we mailed more than 112,000 letters to Californians who did not file a California state income tax return for taxable year 2023. However, these taxpayers appeared to be eligible for CalEITC based on state employment records and one or more state tax returns they filed for taxable years 2020 through 2022. The letters explained how to claim the credit and provided related resources, such as links to FTB's free CalFile Program, the VITA Program, and our EITC calculator to estimate their potential cash back.

Also in July 2025, we mailed more than 85,000 letters to Californians who filed a taxable year 2023 California state income tax return, but did not claim CalEITC, to inform them they appear to qualify for the credit. We provided an estimate of the credit amount they might be eligible for and encouraged them to claim the credit by completing FTB 3514, California Earned Income Tax Credit, and mailing it to us.

In 2024, the second year FTB sent EITC Direct Outreach, we mailed over 300,000 letters to Californians who either did not file a California state income tax return for 2022 or 2023 or who had filed a 2023 tax return but did not claim CalEITC and appeared to qualify for the credit. Of those contacted, approximately 6,600 respondents were allowed a total of $1.1 million in CalEITC refunds.

This effort reflects one of the strategies identified in an FTB report, required by the enactment of SB 1409, a 2020 state law, that explored ways to increase the uptake of CalEITC. In 2022, AB 1863 added to the CalEITC notifications and requires FTB to notify potentially qualified individuals of the CalEITC and paperless filing options.

Emergency Tax Relief

Senate Bill 167 brought changes to how California declares tax relief for those impacted by disasters. FTB collaborated with the Department of Finance to establish a repeatable process to help California’s taxpayers. We updated our webpage for Emergency tax relief reflecting taxpayers impacted by disasters both within and outside of California. Those impacted by the LA County Wildfires qualified for an extension to file and pay taxes until October 15, 2025, and many of those impacted were able to claim a disaster loss on their tax returns. FTB also established a dedicated email box and phone number to expedite services to the survivors.

FTB Website Visits, Page Updates, and Accessibility Remediation and Testing

These statistics reflect the January through November period in 2025:

  • New online resources helped draw a total of 31.1 million visits to ftb.ca.gov, including 13.4 million visits by mobile users.
  • We updated 2,365 of our public webpages–about 99 percent of all live pages, including online tax forms–to ensure we provide the most current and accurate information and conform to the new state web template.
  • We revised or added a total of 5,769 website documents, which all meet state accessibility standards.

FTB Cannabis Information

In 2025, there were no major changes to California’s Cannabis income tax credit opportunities. FTB maintains the Cannabis landing page to provide information on the Cannabis Equity Tax Credit, the High-Road Cannabis Tax Credit, and previously published Tax News articles on this topic. The website also provides information on how businesses and individuals can report total deductions and credits on the Information on Tax Expenditure items (FTB 4197) and offers a dedicated FTB cannabis email address where they can send questions about the credits.

We continue to monitor cannabis legislation pending before Congress and the California Legislature that can potentially affect our programs.

Taxpayers' Rights Advocate's Office Education and Outreach

During Fiscal Year 2024/2025, with COVID in the rearview mirror, our Taxpayers' Rights Advocate's Office (TRAO) increased in-person events, participating in 22 in-person and 12 virtual presentations that served approximately 10,405 taxpayers and tax professionals. The presentations provided information on California tax updates, TRAO services, forms of business ownership, and small businesses tax matters. We continue to consider additional ways to foster and build relationships to reach our underserved communities. Eleven small business events were held for underrepresented/underserved populations.

Inter-Agency Advocates

In March 2025, the FTB Advocate formed a California Inter-Agency Advocate Team. The team is composed of state tax agency and IRS advocates. Members plan to meet quarterly and leverage each other to conduct outreach and provide communication. They are dedicated to fostering collaboration among state and federal agencies to better serve California taxpayers. Through strategic partnerships, and resource sharing, they work to enhance public services and systemic improvements and ensure all California taxpayers receive the assistance they deserve.

Foreign Scholar

Last year, we developed an online Foreign Scholar webinar that offered students a lecture, examples, and frequently asked questions (FAQs) to assist them with filing the appropriate tax forms. Hundreds of international students took advantage of this seminar, available 24 hours a day, 7 days a week, at their convenience.

Small Business

In January 2025, our small business liaison compiled a comprehensive resource guide for business owners affected by the Los Angeles County wildfires. This guide included recommendations on how California’s government agencies can assist small business owners. To address participants at small business expos, we created a QR code to scan for information they needed quickly. This enhancement drew more than 150 visits to our Education and Outreach webpage. Our small business liaison responded to over 1,500 emails for assistance and continues to provide answers to general tax questions, business filing requirements, and advantages/disadvantages of the different forms of business ownership.

Systemic Issue Management System (SIMS)

TRAO received 189 submissions – through FTB’s “Systemic issues” webpage – from taxpayers and professionals reporting big-picture problems in our procedures. We document and address such problems, which mainly include complaints that are outside of SIMS’ scope. FTB’s technical staff continues to upgrade the interface to improve the customer experience and FTB’s analysis of the issue. During Fiscal Year 2024/2025, we resolved the following two systemic issues to improve FTB services:

  • Revised forms FTB 5013 PC and FTB 5012 PC to allow businesses to make multiple entity payments with a single check. The previous forms relied on an Excel spreadsheet in which a user could enter an unlimited number of entities on a single form. However, FTB systems could only accommodate 25 entities per payment, creating a complex manual process to properly allocate more than 25 entities per single payment. This manual process resulted in processing errors and misapplied payments. The new form allows only 25 entities per form, and taxpayers can use as many forms as necessary, and still pay with a single check.
  • Revised the Web Pay response email to clarify that while the confirmation message indicates payment was submitted, taxpayers are encouraged to check their bank account to ensure the transaction was successfully processed. This added language aims to prevent confusion and reinforce the importance of verifying payment completion through their financial institution.

Independent Administrative Reviews

TRAO continues to assist taxpayers who request equity relief or the Advocate's Independent Administrative Review (IAR). Our technical experts received 50 requests in Fiscal Year 2024/2025. Out of those reviewed, the majority were for resets of payment plans where the taxpayer was not in compliance with the terms of the plan. Such issues can be resolved through normal communication channels, including calling the phone number on the FTB notices sent to taxpayers. We did not receive any requests for tax lien reviews. The IAR language is scheduled to be updated on FTB notices to help clarify the qualifications and scope of review. We expect to see a decrease in the number of requests after implementation.

Tax News

Tax News, our monthly technical publication, receives accolades from the tax professional community and has more than 32,000 subscribers. We continue to deliver proactive communication to clarify FTB business operations. We sent 10 Tax News Flashes to inform subscribers of time-sensitive changes regarding emergency tax relief, system outages, and erroneous notices. We also added a feedback survey to get input from our subscribers to help improve FTB processes.

Annual Meetings

We continue to obtain valuable feedback from our external stakeholders. We hold four annual meetings to allow the tax professional community, trade media, and businesses to provide input to improve FTB services. We host the annual Advisory Board for FTB’s Executive Officer to seek meaningful advice and support on various projects and programs FTB administers. As a result of feedback, we created a Self-service options |ftb.ca.gov webpage to encourage tax professionals and their clients to self-serve when possible instead of calling our customer service line.

Tax Appeals Assistance Program (TAAP)

TAAP continues to partner with several law schools throughout California to offer free legal assistance to mostly low-income and underrepresented taxpayers who appealed FTB actions with the state Office of Tax Appeals (OTA). TAAP also strives to assist more taxpayers in need of language services by prioritizing the recruitment of students with multilingual skills.

Since its inception in 2006, TAAP has helped resolve hundreds of cases. Without this vital program, taxpayers would have to face the tax agency and the OTA alone, hire representation they cannot afford, accrue interest and penalties on tax that may have been incorrectly assessed, or just give up and pay the disputed bill. TAAP is not only instrumental in helping numerous taxpayers with the appeal process but helps taxpayers understand their tax issues.

Through TAAP’s assistance, many taxpayers have resolved and settled their cases with FTB prior to an oral hearing before the OTA. This year’s completed cases have fulfilled the purposes of the program:

  • Enhance the preparation for, and quality of, the appeals going to the OTA.
  • Provide taxpayer representation that promotes and achieves more efficient and cost-effective resolution of taxpayer petitions.
  • Prepare the next generation of tax legal professionals.

In Fiscal Year 2024/2025, TAAP informed 323 individuals and businesses about the program, accepted 71 new cases, and resolved 52 cases. The TAAP program only assists with cases where the amount in dispute is less than $30,000 and prioritize low-income or under-resourced taxpayers. Taxpayers can find out if they qualify for the program by visiting the Tax Appeals Assistance Program landing page. Forty-one students participated in the program and TAAP represented two taxpayers at oral hearings in front of the OTA.

TAAP has been well received by all 11 participating law schools and makes a positive difference in the lives of its clients.

Public Affairs Education and Outreach

FTB's Public Affairs Office educates taxpayers about filing requirements, eligibility for valuable tax credits, and other important tax issues through interviews with television, radio, and print media outlets, as well as through FTB's website, social media campaigns, videos, printed brochures, press releases, and webinars. Public Affairs' efforts align with the entire department to communicate information to the news media, taxpayers, tax representatives, and other stakeholders. Over the past year, media and taxpayer inquiries included those related to the following:

  • Los Angeles County’s extension to file and pay taxes due by October 15, 2025, the Pacific Palisades and Altadena fires.
  • Avoiding tax scams.
  • FTB’s use of machine learning/artificial intelligence.
  • California’s participation–through FTB’s CalFile service–in the IRS’s Direct File free online filing program.

In Fiscal Year 2024/2025, FTB carried out a comprehensive outreach campaign to boost awareness and participation in the CalEITC, the Young Child Tax Credit, and the Foster Youth Tax Credit. Public Affairs primarily distributed outreach materials such as flyers, posters, brochures, and social media toolkits in digital format, making them available for download on FTB’s CalEITC “Outreach materials” webpage.

Most materials, including our easy-to-use EITC calculator, were available in California’s top 10 languages: English, Spanish, Armenian, Chinese (Mandarin), Korean, Tagalog, Vietnamese, Arabic, Farsi, and Hindi. Materials were shared with a wide network of partners, including nonprofits like the United Ways of California, state legislative offices, and state and local agencies, enabling direct access to Californians most likely to qualify. A focused social media campaign and annual global messaging to state employees, in partnership with the State Controller’s Office, further spread awareness.

FTB also distributed thousands of printed materials to reach individuals through community-based and in-person channels. In partnership with the Office of State Publishing and CalFresh, about 70,000 CalEITC flyers were distributed through food banks by including them in food boxes. An additional 21,000 flyers and posters were shared through foster youth and community outreach partners. To broaden public visibility, FTB launched an outdoor CalEITC advertising campaign in spring 2025 that included 40 billboards and 70 transit shelter advertisements throughout the Sacramento, San Francisco, Los Angeles, and San Diego metro areas.

Public Affairs continued its active role in the Department of Community Services and Development and State Interagency Team Reducing Poverty Workgroup to provide outreach updates, data insights, and legislative context to support coordinated efforts across state agencies.

Public Affairs also engaged in several marketing and communication efforts last year to promote the IRS’s free Direct File service and its relationship to California’s longstanding free CalFile service, which included the following:

  • Created flyers and posters promoting Direct File and CalFile for distribution to various food banks throughout the state as well as to our Foster Youth Tax Credit partners, many of which are located at colleges. We also created a flyer advertising MyFTB and promoting MyFTB registration, which is necessary to use CalFile. Both flyers were in English and Spanish.
  • Launched a social media campaign to promote Direct File and CalFile on Instagram, Facebook, X, LinkedIn and YouTube, and created a social media toolkit distributed to our CalEITC outreach partners.
  • Worked with the state Department of Health Care Services to include a mention of Direct File in a notice they sent their nine million Medi-Cal subscribers.
  • Filmed a segment to be included in FTB field office lobby videos that featured the state controller, the chair of FTB, promoting Direct File.

Translation for Limited English Proficient Taxpayers

Translations of CalEITC and other materials into multiple languages is handled by FTB's Multilingual Communications Program. The program provides vital services to our Limited English Proficient (LEP) taxpayers, as well as to our bilingual customer service representatives and the tax preparers who serve LEP taxpayers.

Our goal is to ensure LEP taxpayers have equal access to the tools and resources available to file tax returns timely, accurately, and pay the correct amount without experiencing delays due to a language barrier.

FTB's website offers 98 webpages and three web applications translated into the following languages:

  • Middle Class Tax Refund Estimator in Spanish.
  • Check Your Refund Status application in Spanish.
  • EITC calculator in Spanish, Chinese, Vietnamese, Korean, Arabic, Armenian, Farsi, Hindi, and Tagalog.

Over the past year, we translated new or updated FTB public webpages into Spanish, including:

  • CalEITC webpage.
  • EITC Credits webpage.
  • Foster Youth Tax Credit webpage.
  • Young Child Tax Credit webpage.
  • Head of Household webpage.
  • Part-Year Resident and Nonresident webpage.
  • Payment Plans webpage.
  • Deductions webpage.
  • Forms and Publications webpage.
  • Tax Professionals Health Care Mandate webpage.
  • Spanish Index webpage.
  • News Releases webpage.
  • Health Care Mandate webpage.
  • Health Care Mandate Tax Professionals webpage.
  • Middle Class Tax Refund Statistics webpage.

Other translations made over the past year include the following:

  • EITC Social Media Post Messages in Chinese, Korean, Vietnamese, Arabic, Armenian, Farsi, Hindi, and Tagalog.
  • FTB 3514, 2024 California Earned Income Tax Credit Booklet, in Spanish.
  • FTB 854, CalEITC Flyer Taxable Year 2024, in Spanish, Chinese, Korean, Vietnamese, Armenian, and Tagalog.
  • FTB 856 SP, CalEITC Poster Taxable Year 2024, in Spanish.
  • FTB 853 EN-SP, Foster Youth Tax Credit Flyer, with Spanish on opposite side of English.
  • MyFTB/Calfile Flyer and Poster in Spanish.
  • Direct File Flyer and Poster in Spanish.
  • FTB 3352 SP, Identity Theft Affidavit, in Spanish.
  • FTB 3568 SP, 2024 Alternative Identifying Information for the Dependent Exemption Credit, in Spanish.
  • FTB Pub. 1034 SP, 2024 Disaster Loss, How to Claim a State Tax Deduction, in Spanish.
  • FTB 540 2EZ SP, 2024 California Personal Income Tax Booklet, in Spanish.
  • FTB 3525 SP, 2024 Substitute for Form W-2 Wage and Tax Statement, in Spanish.
  • FTB 3532 SP, 2024 Head of Household Filing Status Schedule, in Spanish.
  • FTB 3519 SP, 2024 Payment for Automatic Extension for Individuals, in Spanish.
  • FTB 3567 C2 SP, Installment Agreement Request, in Spanish.
  • FTB 3872 SP, 2024 California Disaster Relief Request for Postponement of Tax Deadlines, in Spanish.
  • FTB Pub. 1540 SP, 2024 California Head of Household Filing Status, in Spanish.
  • Interactive Voice Response Scripts, in Spanish

We provide access to our programs, services, and facilities in accordance with Title II of the Americans with Disabilities Act of 1990. At the taxpayers' request, we provide reasonable accommodations in alternative formats.

We regularly translate major news releases into Spanish. We offer bilingual Facebook Live videos about tax issues in English-Spanish and English-Russian, and we often translate key social media posts into Spanish and other languages as appropriate.

Nonwage and Real Estate Withholding Outreach and Education

Our Filing Division’s Withholding Services and Compliance Section continued its communication and outreach efforts with external stakeholder groups throughout 2024 and 2025. They delivered virtual presentations on real estate withholding requirements for traditional, like-kind exchange, and installment sale transactions at a variety of industry conferences and association meetings. Our section proactively scheduled recurring monthly presentations on nonresident and real estate withholding so that withholding agents and escrow professionals don’t have to wait for a conference or meeting to receive the information. We also released two new YouTube videos covering nonresident withholding exemptions, waiver, and reduction requests and the Voluntary Disclosure Program.

Exempt Organizations Education and Outreach

FTB’s Exempt Organizations Unit participated in an outreach event sponsored by the California Lawyers Association. FTB’s representative engaged with members who are representing their nonprofit clients. Topics discussed include:

  • The exemption process, including FTB’s time frames for processing exemption applications.
  • Maintaining compliance with exempt organization filing requirements.
  • FTB efforts to assist nonprofits seeking to dissolve.
  • California conformity with recent federal tax law changes.
  • Various current issues identified by FTB auditors.
  • Other items by audience request.

Increased Enforcement Capabilities

Although FTB encourages voluntary compliance by providing taxpayer education, as well as pre-filing assistance and information, FTB continues to identify ways to improve its enforcement and collection capabilities.

Audit

The Audit Division staff works with taxpayers and their representatives to administer and enforce the law effectively to ensure all taxpayers meet their obligations to file correctly and pay the proper amount of tax owed. We use innovative methods to promote these objectives through customer service, education, self-compliance letters, initiatives, and partnerships with federal and state agencies. In performing these activities, we consider the effects of audit activities on taxpayers as well as the increases in timeliness and effectiveness of enforcement actions. All of our work focuses on adherence to the California Code of Regulation 19032, Audit Procedures, to complete audits in a timely manner.

We collaborate with subject matter experts to operate our programs in an efficient manner and to also seek better use of technology and data. We continue to seek new opportunities to form partnerships with taxpayers, their representatives, and other agencies to continue to promote best audit practices.

In addition, Audit Division staff participate and provide periodic educational information to the public, including at CalTax and California Society of Enrolled Agents events. The division shares information relating to what to expect during an examination, understanding the audit process, and communication with Audit Division staff.

California's Tax Gap

The tax gap is the difference between what is properly owed to the state and what is voluntarily reported and paid timely.

The three components of the tax gap are:

  1. Underreporting, which is under-reporting of income or revenue or the over-reporting of expenses on a timely filed tax return.
  2. Underpaying, which is the amount of tax reported on a timely filed tax return that is not timely paid.
  3. Nonfiling, which is the tax not timely paid by those who do not timely file a tax return.

California’s tax gap is approximately $25.5 billion a year. We based this amount on the IRS’s most recent study, released in 2022, with adjustments for California laws and the California economy. The dollar amount of the tax gap does increase because the economy will expand over time, but FTB’s compliance efforts help keep the percentage of compliance steady.

Addressing compliance remains a top priority and we are fully committed to ensuring a fair tax system for all California taxpayers. We address compliance by improving the collection of data, which drives our taxpayer education and outreach efforts to encourage self-compliance. The right data also allows us to build compliance campaigns to identify those areas of noncompliance most in need of attention.

FTB’s EDR2 project includes modernization that captures more data and provides new technology that enables us to identify potential compliance issues earlier and assist taxpayers with resolving these issues using self-service options. As part of the compliance efforts in EDR2, FTB piloted the Return Review letter campaigns for Schedule A and Schedule C, in which we contact taxpayers suggesting they review the items and file amended returns if corrections are needed to their Schedule A or Schedule C forms in the tax return filing. These efforts have generated over $29 million in additional revenue to the state of California to date. The Audit Division has operationalized these pilot efforts and is in the process of developing future efforts through its Marketing Campaign group.

Criminal Investigations

FTB's ability to gain tax compliance involves enforcement action through our Criminal Investigation Bureau. FTB special agents are sworn peace officers responsible for investigating individuals and entities suspected of committing felony violations of the Revenue and Taxation Code. These violations include income tax evasion, income tax fraud, and the concealment of assets to evade the collection of tax. Special agents also conduct investigations of related crimes such as money laundering and fraud schemes, including refund fraud and preparer fraud, in which the state of California is a victim. Investigations are referred to the local district attorney’s office or state attorney general for criminal prosecution, which may include an order for restitution and cost of investigation.

FTB special agents also work in conjunction with other law enforcement agencies and participate on task forces such as the Tax Recovery in the Underground Economy and the Northern Impact Workers’ Compensation Insurance Fraud Task Force. These efforts join existing local, state, and federal resources to collaboratively combat illegal activities that rob California of public funds and its citizens of public services.

Accounts Receivable Management (Collections)

The ARM Division is responsible for managing delinquent debts entrusted to FTB, such as personal income tax and franchise and corporate income tax. We also collect various nontax debts, including debts owed to California’s courts and local jurisdictions, delinquent vehicle registration, CalSavers employer penalties, and victim’s restitution orders and fines.

We collect on tax accounts receivable that are established by self-assessment or audit, settlement, and filing enforcement actions. An automated billing system, combined with central and field office collection staff, administers collection activities.

Our collection approach is founded on the principle that we use the least intrusive action first to gain compliance. Our collection strategy is to encourage taxpayers to resolve their debts as quickly as possible through the method best suited for their situation to help them achieve long-term compliance.

The collection staff performs manual collection efforts to ensure that noncompliant taxpayers contribute their fair share to the General Fund. The following are the revenues collected in Fiscal Year 2024/2025 through FTB’s collection programs.

Tax Programs3

Tax Programs Amount
Personal Income Tax $4.73 billion
Business Entity Tax $1.37 billion
Total $6.10 billion

Nontax Debt Programs4

Nontax Debt Program Amount
Court-Ordered Debt $84.4 million
Vehicle Registration $381.3 million
Interagency Intercept Collections $231 million
Total $696.7 million

Administrative Dissolution

FTB implemented the Administrative Dissolution Program on January 1, 2019, after being given authority, with the enactment of AB 2503, to administer the program for business entities seeking relief, and with the objective to improve compliance. Domestic corporations and domestic LLCs who ceased doing business and have no assets can now request a Voluntary Administrative Dissolution or Cancellation (taxpayer initiated). To date, we have received 40,541 requests for dissolution or cancellation. Of those resolved thus far, 11,520 business entities were approved for administrative dissolution.

On January 1, 2020, FTB implemented a second phase of the program and began evaluating business entities for Administrative Dissolution or Cancellation (FTB initiated), provided they ceased doing business, show suspended for 60 or more consecutive months and met other established criteria. Overall, the program is doing what it was intended to do: assist domestic corporations and domestic LLCs registered with the Secretary of State for more than 12 months that have stopped doing business, never did business, and have no assets to dissolve or cancel their business. FTB is pleased with the program and progress in processing 34,318 requests to date to help businesses save money, making it easier to dissolve a business and educate business owners and their representatives.

Legal

FTB’s Legal Division supports enforcement efforts by providing consultation and litigation support for positions developed in cooperation with FTB’s enforcement programs. Support activities include providing representation in protest hearings, appeal proceedings before the Office of Tax Appeals, settlement of cases, supporting Attorney General staff in tax litigation proceedings, and representation in out-of-state bankruptcy and collection proceedings.

Footnote

  1. As of January 1, 2026, the IRS Direct File program has been discontinued.↵
  2. Tax Accounts Receivable revenue increased from $4.49B (FY 23/24) due to the delayed federal and state tax filing deadline that pushed delayed revenue into FY 24/25. BE's revenue increased due to resolving the backlog of notices' suspension for the last 2 years, resulting in higher revenue in FY 24/25. ↵
  3. Court Ordered Debt (COD) revenue increased from $73.9M in FY 23/24 due to an increase in notice volumes and client base. VRC revenue increased from $335.7M in FY 23/24 due to an increase in notices sent. Interagency Intercept Collection (IIC) revenue declined from $277.4M in FY 23/24 due to legislation AB 194, which reduced refunds eligible for offsets.↵
Last updated: 01/15/2026